Consumers are Value-driven – Retailers Should Be Data-driven
Contrary to popular belief, the retail experience does not end the moment a customer pays for a product. People demand clear returns, refunds, or exchanges process. What retailers don’t recognise is the impact of a poor after payment experience; it will result in them losing customers, loyalty, and, ultimately, profitability.
Every retailer, whether online or offline, claims to focus on customer satisfaction, the customer is king – they say. While this is still true, a lot has happened to the way retailers seek to satisfy customers. The time when the shopping experience ended the moment a customer’s cash was handed over is now a relic of a bygone era. Expectations have changed, customers now want a consistent customer experience across all touchpoints – before, during, and after payment.
Online commerce, changing consumption patterns, and fierce competition from global big tech companies are shaping the consumer as we know him or her.
“Consumers have become much more demanding, and their expectations of retailers and the shopping experience they deliver is at an all-time high. Today, consumers investigate the product thoroughly before purchasing or ordering it. On top of that, they expect retailers to understand their needs even before they enter the store. The new reality and the rapid development and adoption of day to day lifestyle technologies and social platforms have gone a long way in shaping that,” Bettina Thorkelin, Nordic Director at Valitor says.
According to a report conducted by Valitor, a majority of consumers – especially the new generation Z from age 18 to 25 – are open to sharing data on how, when, and where they made a purchase. The younger generation makes it clear that they expect the same great experience instore and online.
What can retailers do to ensure customers are satisfied during the post-payment experience? Get the report here
“Retailers must understand their customers, personalising communications and experiences so that shoppers feel valued rather than bombarded. A 360-degree view of customer behaviour, online and offline, can be valuable. The retailer must take advantage of and carve out a distinct voice and purpose across all channels that consumers use to browse, shop, and return,” says Thorkelin.
In other words; consumers are value-driven – retailers should be data and experience driven. One option here is to implement an omni-channel payment solution that provides insight into shopper transactions across multiple channels. For example, by understanding where and when a shopper makes repeat purchases, a retailer can deliver relevant and personalised offers that add real value while continually improving the customer experience they provide. Customer retention is a significant area of impact for an omni-channel payment solution as better personalisation, and a better understanding of customers consistently allows retailers to deliver better value to customers.
One token to rule them all
While the customer is still king, the critical factor in appealing to – especially – the younger clientele has changed. As behaviour changing technologies arise and grow, so does the challenge and complexity for merchants as they try to retain their position and purpose in the market, navigating multiple channels and platforms to meet these requirements.
“When it comes to payment solutions, Europe is fragmented with many different payment methods. A pan-European merchant will most likely have to deal with different payment solutions. The Nordic region is much more digital than the rest of Europe. In Denmark, many use Mobile Pay, and Norwegian consumers use something different and in Germany a third,” explains Halldór Lúðvígsson, Managing Director at Valitor.
Merchants are forced to manage multiple different projects to cater for this, which can often be costly and resource heavy to implement. When merchants do business across Europe, they must invest in different systems, payment methods, and platforms. Highly complex and complicated infrastructure, along with bureaucratic and technical tasks for financial departments, results in very manual, resource heavy work, with multiple systems involved to update and maintain the different platforms.
Merchants have to implement multiple payment methods in different countries to cater to the preferences of the local market. It is no big challenge for retail incumbents like Amazon, Zalando, or Walmart who can easily collect data across markets and countries, but Valitor’s solution gives retailers of any size the ammunition to fight back against increasingly fierce competition across every channel.
How can retailers improve their post-payment experience? Get the report here
“Through cross channel tokenisation, we can track and convert data from transactions into actionable insights, that means more personalisation, better service delivery, and better customer experience. Whether I use my credit card in Denmark or Iceland to buy something in a webshop, the purchase is mapped to an individual token so that merchants can identify that shopper across all the channels and as such make smart and personal decisions about how to best serve them. We provide this for all our customers, and it is a key differentiator for us in the market,” Lúðvígsson says.
Valitor simplifies the complexities of managing multiple systems in multiple geographies to deliver best in class customer experiences. Payments are intrinsic when considering how to navigate the challenges of the modern day retail landscape, the ability to make multiple platforms work together is a massive win for retailers.
Loyalty in return
In further research conducted by Valitor, it was discovered that up to 60 per cent of consumers wish for a long-term relationship with a merchant they feel connected to and valued by, but will not hesitate to share negative reviews if they feel badly treated. The research highlighted that the primary thing that annoys consumers the most are strict and complicated return policies.
“Only a few platforms can offer an easy and seamless return policy. Many retailers struggle to recognise a consumer and handle the return automatically. With a tokenised solution, the consumer can buy a product in Iceland and return it in Denmark because the merchant has the opportunity to recognise the consumer,” Thorkelin says.
What is the most important aspect of the post-payment experience that retailers should focus on? Get the report here
While revenue continues to rise from online commerce, physical stores are struggling to keep up with them. Physical stores are not playing to their experiential strengths and in the face of fierce competition and pricing wars, the retail landscape looks to get even more difficult. Those who don’t capitalise on the opportunity to carve out a distinct and exciting experience within their physical stores will face being wiped out.
“This does not mean that the high street will be extinct in a couple of years. Consumers need to feel and experience products and brands in the future “high street”. Physical stores will become experience and convenience centres that project all the values and services that retailers want their everyday shoppers to buy in to and regularly use,” Thorkelin says.
Much indicates that physical stores must get used to a new reality in the future — an omni-channel one. Retailers must use data from all channels to increase understanding of customer behaviour and ultimately boost sales through perfectly curated shopping experiences, adding applications and services that support the purchasing experience we know. Retailers must do this to reach the high standards of the modern shopper, exceed their expectations, and ultimately ensure the survival of their business.